For Time Being, Cadillac To Remain Niche, But Unique Player In Europe

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GM’s storied luxury brand has recently experienced a rebirth in the Old World. That kind of revitalization was a pure necessity, since the success, or rather the development, of Cadillac in Europe is an exemplary tale of old GM mismanagement, coupled with sporadic repercussions of the global economic downturn, and a dash of bad luck.

For instance, Kryomans, the independent firm that was responsible for importing and distributing Cadillacs in Europe, filed for bankruptcy about two years ago during the worldwide carpocalypse, causing European sales of the Wreath and Crest to sink to historic lows of approximately 1,200 vehicles in all of 2010. In case that didn’t get your attention, let me restate that merely 1,200 Cadillacs were sold in all of Europe during the year 2010. And then there was the issue of the Kroymans liquidation, which resulted in the temporary seizure of imported Cadillacs due to the Kroymans bankruptcy proceedings — an event preventing dealers from restocking their stores with new inventory. But we mustn’t dwell on the past. Today, Caddy has a new lease on life in Europe.

Not A Volume Player

Contrary to what common logic may have you believe, Caddy’s near- and mid-term goal in Europe is not to attain a market presence similar to that of Audi, BMW, or Mercedes-Benz; sure, which brand or automaker doesn’t aim to sell more of its products? But for Cadillac, it’s more a matter of reality… which translates to successful exclusivity.

Armed with nothing but the CTS, SRX, and Escalade, Cadillac doesn’t even offer half of a model line from any one of the German three, which pretty much battle each other across all segments. Add to that the fact that the Wreath and Crest brand doesn’t offer diesel engines, which account for up to 80 percent of some automakers’ sales in some European markets, and the reality becomes that much more pressing.

ATS, XTS Will Help

Next year’s release of the ATS sport compact and the Epsilon II-based XTS full-sized sedan will allow Cadillac to expand the size of its target market not only in North America and China, but also in Europe. But then there’s the retail problem…

A Retail Game

Cadillac has a mere 40 dealers across Europe and another 120 repair centers — numbers that are exponentially lower than those enjoyed by ze German big three. And therein lies the rub: getting more dealers onboard would be tough considering these low sales… and increasing sales is difficult without more consumer outlets. It’s the classic problem of chicken or the egg.

Tradition

As if all those barriers didn’t create a big enough challenge for Caddy, consider this: the German three have been around for decades. Mercedes-Benz and Audi, in fact, have been in business for centuries. To say that there’s a sense of deep-rooted culture, tradition, and folklore associated with the home-turf brands would be an understatement. And German consumers aren’t nearly as fickle as the type in the ‘States. To our dismay, Cadillac’s U.S. heritage doesn’t hold the same amount of weight in Europe.

Niche, Yet Exclusive

The brand currently expects to sell 1,000 units in Europe in all of 2011. If that sounds minuscule, that’s because it is. However, such low numbers carry one benefit: they allow Caddy to be an exclusive brand that’s rare, as in Lamborghini rare. Maybe even Koenigsegg rare. That kind of exclusivity tends to turn heads — and a Cadillac in Europe tends to do just with greater frequency than a BMW, Audi, or Mercedes… simply because it’s a hard-to-find brand and thus, a special occurance.

Fortunately, a Cadillac doesn’t carry the same low attainability factor (read: price) as Lamborghini and Koenigsegg… so it may be just a matter of time before this exclusivity turns itself into a strength — prompting more European luxury buyers to purchase Cadillacs to set themselves apart from the crowd while raising eyebrows on the Autobahn.

Profitability

It goes without saying that it’s our most sincere hope to see Caddy at least match the sales output of Germany’s big three in due time. At the end of the day, however, Cadillac will continue to sell in exotic numbers among the luxury players in Europe. However, a Cadillac Europe spokesperson recently told us that the lack of subsidiaries allows the brand to be profitable there — even at these very low numbers. To us, that means one thing: there’s nowhere else to go… but up.